Attorney General nominee Lynch doubles down on pro-Web gambling views

Online betting is legal in Delaware, Nevada, and New Jersey. More states want it.

Loretta Lynch, tapped by President Barack Obama to become the nation's next attorney general, said that if she's confirmed, she likely wouldn't alter the Justice Department's landmark opinion that opened the door to legal online gambling for the first time.

Online, casino-style gambling was thought to be illegal in the United States until 2011, when the Justice Department's Office of Legal Counsel (OLC) said it was OK (PDF) as long as it was done in-state and that Internet sports wagering was prohibited.

Beyond Nevada, New Jersey and Delaware are the only other two states offering Internet gaming, but as many as 10 states are considering it.

Lynch, now the US attorney for the Eastern District of New York, was peppered with questions about Internet gambling during her Senate confirmation hearing last month. But in follow-up written answers to questions, she explained her views even more last week.

In response to a question from Sen. Lindsey Graham (R-S.C.) she said she would review the OLC opinion but wouldn't likely alter course.

If confirmed as Attorney General, I will review the Office of Legal Counsel opinion, which considered whether interstate transmissions of wire communications that do not relate to a sporting event or contest fall within the scope of the Wire Act. It is my understanding, however, that OLC opinions are rarely reconsidered. If confirmed, I will read the opinion and if it articulates a reasonable interpretation of the law, I would welcome the opportunity to work with you and other Members of Congress to address concerns about online gambling through legislation.

She added that she believes the OLC opinion still makes it unlawful to bet on sports online.

"OLC concluded that the Wire Act does not extend to interstate transmissions of wire communications that do not relate to a sporting event or contest," Lynch wrote (PDF). "As noted in my response to question 1, above, if confirmed I will review the opinion and determine whether I find OLC’s interpretation of the statute to be reasonable."

Rep. Jason Chaffetz (R-Utah) has reintroduced legislation, backed by casino mogul Sheldon Adelson, that would undermine the OLC opinion and make online gambling unlawful, even if it was already legalized by a state government.

Online gambling, however, hasn't produced blockbuster results as anticipated.

Among the major problems within the three states with legalized online gambling, players must physically be inside of the four corners of the state to wager. This is checked via IP address and location-tracking software that verifies a gambler's coordinates when logging into the system.

Ultimate Gaming, an online gambling concern that went belly up in Nevada in November, said the rules were too onerous.

"As has been the case in other jurisdictions, online poker revenues in Nevada have fallen far short of original projections,” Tom Breitling, chairman of Ultimate Gaming, said in a statement. "Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations."

A vote on Lynch's nomination to succeed Attorney General Eric Holder is not expected until next month at the earliest.

David Kravets
The senior editor for Ars Technica. Founder of TYDN fake news site. Technologist. Political scientist. Humorist. Dad of two boys. Been doing journalism for so long I remember manual typewriters with real paper. Emaildavid.kravets@arstechnica.com//Twitter@dmkravets